Palestinian unrest, economic malaise rising

While the Palestinian West Bank and Gaza have up to now escaped the turbulence unleashed by the Arab Spring in the Middle East, the situation there may be entering an extremely dangerous period, with unpredictable consequences for the leader of the Palestine Authority in the West Bank, Mahmoud Abbas.

Over the past several months, the Abbas government has confronted a number of demonstrations against its purported mismanagement of the economy, systemic corruption, plus brutal crackdowns by security forces against Abbas opponents, particularly supporters of the radical Hamas movement in Gaza and militants active in actions against Israel.

Unfortunately for the Palestinian Authority president, opposition to him took a dramatic turn on Aug. 27 when, during a meeting with a visiting delegation of rabbis led by former Israeli minister Michael Melchior, Abbas stated, "Israel was founded in order to remain and not in order to vanish, (but) its continued (existence) should not be at the expense of the absent Palestinian state."

While Abbas's conciliatory comments would be welcomed by many within the global community, especially the Obama administration, they had the opposite response within the Palestinian population.

Predictably, Hamas condemned them, some Hamas leaders demand he retract his statement, others insisting the Palestinian people should remove him from office.

As if the president wasn't already in enough trouble over his moderate comments about Israel's right to exist -- which militant Palestinians and many Arabs vociferously reject -- in recent days the International Monetary Fund, IMF, issued a warning the Palestinian economy is heading for a further slowdown in growth and a likely increase in unemployment, already 19 per cent in the West Bank and a whopping 30 per cent in Gaza ruled by the Islamist Hamas movement.

The IMF's official responsible for the West Bank and Gaza, Oussama Kanaan, said the present economic problems faced by the Palestine authorities stemmed primarily from continuing curbs on Palestinian trade imposed by Israel and a major drop in donor money from outside countries, including Arab governments.

This bleak situation in Israel's backyard at a time when the government of Prime Minister Benjamin Netanyahu is warning of the dangers presented by Iran's nuclear program and calling for the United States to take firmer action against Iran is the last thing anyone needs during a turbulent period in the Middle East, with extremist groups unleashing violence in several Arab countries.

Instability in Palestine would have extremely dangerous ramifications for Israel's security.

No one in Israel or the United States is unaware of the dangers arising should the relatively moderate administration of Mahmoud Abbas be undermined or replaced by those who object to the current pragmatic relations between the Palestinian authorities and Tel Aviv, especially in the security and intelligence spheres where the two sides have co-operated in trying to control extremist groups, some of which threaten both the Abbas government and Israel.

While Abbas may survive the outrage of Hamas and other Palestinians over his comments Israel has a right to remain in the region, whether he can survive a further deterioration of the economy is uncertain.

In recent days, in an attempt to defuse tension over the increasing economic problems confronting ordinary Palestinians and escalating unemployment, the PA's prime minister, Salam Fayyad, himself the subject of widespread criticism, announced he was revoking a number of recent austerity measures.

Interestingly, conscious of the threats posed by the removal of the Abbas government and potential radicalization of the Palestinian population, the Netanyahu government announced it would transfer $64 million in tax revenues ahead of schedule to the Palestinian Authority from revenue it collects on behalf of the PA.

Although such measures may stave off a potential economic crisis with accompanying social instability, it's important that Israel and other key governments, including the Harper government, take concrete steps to deal with not just the chronic economic difficulties of Palestine but also commit themselves to meaningful steps toward facilitating the long overdue sovereignty of Palestine mandated by the United Nations in 1947.

Harry Sterling, a former diplomat, is an Ottawa-based commentator who writes regularly on Middle East issues.

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